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Blockchain has become an absolute game-changer in the world of finances globally. Blockchain is digital record-book technology. It is a decentralized ledger system in financial services to keep records of transactions made between different parties in a verified and secured manner. These records of transactions help every business to keep its transactions manageable and secure. Blockchain is a system that allows infinite numbers of different parties to make transactions privately and in a more secure way without the need of any third party.

Also, Blockchain traceability holds a great place in supply chain management. Blockchain helps to improve supply chains by accessing fast and cost-friendly delivery of products, magnifying product traceability, making improvements between connections of parties, and assisting in financing services. Blockchain-based technology gives parties a unique opportunity to trace their supply networks and create transparent supply chains.

Traceability is a record of all processes of products through the supply chain. The traceability application is mostly used by the cosmetics, food, alcohol, and pharmaceutical industries. In this article, we are going to have a look at what advantages Blockchain provides and how it helps supply chains with traceability.

Supply Chain

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A Supply Chain is a whole system of people and companies who are involved in the process of creating an item to deliver it to consumers. The connection of the chains starts from the manufacturers of raw materials and ends with the van that delivers the final item to consumers. A supply chain is a whole process that includes every step to deliver the final product to the customer. The steps include getting raw material, sending it to production, and then delivering the final product to retail stores where the consumers buy.

The organizations that are engaged in the supply chain system are manufacturers, sellers, warehouses, transportation firms, distributors, and then retailers. The process of the supply chain starts when a business gets an order from its customer.

Supply chain management is a critical process to manage because an enhanced supply chain benefits more companies. It lowers the costs and enhances its production cycle. Companies struggle to improve their supply chain systems to lower their costs. If the supply chain management is effective, it boosts the efficiency of production and becomes profitable. But if one line breaks, it can be too much costly.

Challenges that Supply Chain Faces

Profit margins are at risk because of the continuous rise in production costs from different networks. The reason for an increase in costs is:

  • The increasing price of fuels to deliver goods by road, by sea or by air
  • Rising commodity price results in costly raw materials
  • High labor wages from manufacturers
  • Critical international management is resulting in high costs for storage, transfer, and management of products.

The need for traceability in the world of supply chain management has increased because of the issues manufacturers are facing. The shipping industry has to spend half of their asset on transportation paper works. Still, it has a concern of mislabeling of products.

Further, many products are delivered in illegal ways. Another issue that is prominent in the supply chain is that manufacturers are producing luxury goods under the name of some other organizations. Because of this counterfeiting, it has become an absolute need to introduce traceability based on Blockchain.

How Blockchain Improves Supply Chain

The constant use of public or private Blockchain helps in introducing traceability and accessibility in the movement of goods. Blockchain is usually helpful for the organization in improving the efficiency of their businesses by reducing costs in supply chain frameworks.

We are going to discuss in this paragraph what traceability is and how it helps to improve supply chain management. The supply chain generally has a crucial network of manufacturers, vendors, transporters, and retailers. The ledger of Blockchain helps in the smooth-running of all organizations in the supply chain. However, this Blockchain infrastructure helps in improving the visibility of all the activities that are being made by different networks.

The ledger of Blockchain technology has the capability of transforming the regular supply chain by introducing traceability in this technology. Blockchain traceability has become a necessity in supply chain management because of the increase in demand for providing information about a product. It can help organizations to understand the supply chain operations more briefly. It also makes sure that consumers are engaged with verified and immutable data.

Benefits of Blockchain Technology in Supply Chain

The constant use of Blockchain traceability in supply chain management can improve security, transparency, and traceability. However, it can also help by automating the process, which helps in reducing costs and risks. Blockchain technology helps in traceability and visuality. It lowers the risks of counterfeiting and improves the efficiency of whole supply chain management.

Therefore, the use of Blockchain brings many advantages of traceability, transparency, and tradability.

Let’s have a look at how Blockchain benefits the supply chain.

Better Security and Transparency

Transparency of data has become a major issue in businesses. To make their transparency better, the authorities have tried to carry out more rules and regulations. But centralization is the main issue because of which any system doesn’t become 100% transparent. Blockchain is a decentralized system through which authorities can make transparency much better without the need for any third centralized authority.

All the transactions in Blockchain are permanently recorded, which gives access to organizations to view their entire history with brief transparency and virtually clear any possible fraud activities. Blockchain technology has a great resistance against hacking because all of the data is transparent and stored in different chains.

All the consigners and merchants in the supply chain want to see the details of every cargo e.g., its route and speed. This helps to increase the trust between parties that are working together under the custody of one chain. Using Blockchain technology also removes the chances of illegal transportation of wrong stuff.

Reduced Costs

Nowadays, businesses spend a lot of money to enhance their systems. Because of this, they want to reduce their costs and invest their money to build up new things to improve their systems.

With the use of Blockchain, authorities can bring down their costs because it is not a centralized system. In this system, they don’t have to pay vendors. Further, not much time is needed to validate their transactions, and it lessens the cost of managing basic systems.

High Speed and Improved Efficiency

Blockchain basically benefits businesses by improving speed and efficiency. It solves all the time and energy-consuming processes and automates the process to improve efficiency. It also solves human-made errors with the help of its automation process. Automation in the process simply means that system has become more efficient and fast.

True Traceability

Companies work on creating supply chains that work both with vendors and good with the help of Blockchain traceability. In the common supply chains, it is hard to trace goods which leads in making problems and also risks of theft and loss of items.

The supply chain has become more transparent with the help of Blockchain traceability. It gives access to every authority to trace their items and make sure that their goods are not being replaced or misused during the whole process of the supply chain. Different authorities can also implement traceability in their houses.

Enhanced Security

Blockchain provides more proficient security as compared to other record-keeping systems. Each transaction that is made across parties is encrypted with codes and is linked to old transactions by the hashing methods. Each node in Blockchain has a copy of transactions made on this network, so if any fraud group wants to make changes in a transaction, the other node rejects its request to make changes.

Trustworthy Information

The transparency of Blockchain has a major role in documentation and administrative processes. It presents all the details about the goods and their origin so that dealers and producers make sure that the product is not fake or made by illegal child labor. The Blockchain system can also ensure the origin and individuality of luxury products which are most likely to be at risk of being fake.

When drugs and foods are being produced, it becomes more important to confirm the proper products to make sure that who is blameworthy for rotten foods and diseases spread across consumers. One more benefit that transportation country obtains from Blockchain technology is that it gets all the information of vehicle history and see how efficient it works.

Achieving Blockchain Traceability

Globally, the supply chain keeps track of the process of goods, including consumer products. Also, the supply chain also deals with product recall when different raw materials and products are recalled to prevent injuries. The returning of dangerous products has a disturbing negative effect on thousands of people due to loss costs. So, what helps in the technology of traceability in the Blockchain ledger system?

Blockchain is basically a set of blocks in which all the information regarding a product is stored. And then, the current block is stored on the previous existing block with a hashing function. If you need to access this information, you need to decrypt the hash process to get access to desired data.

Every Blockchain contains the date and time of transactions along with the data of contributors who are involved in transactions. Therefore, it has a detailed chronological record of financial data and project details where you can find the different processes a product has passed through in the journey of the supply chain.

Implementing Blockchain Traceability

Supply chain traceability is one of the comprehensive methodologies for identifying and organizing system requirements. Blockchain basically offers the resilience of tracking any digital or physical product across all the phases it has gone through.

You may have noticed that many organizations and industries depend on third-party authorities to create and label final items. On the opposite side, the value of traceability in Blockchain depends on the transparency in product tracking.

Therefore, the manufacturers and producers can have a clear view of their products, and they can make sure that they can guarantee the efficient process of third-party productions and the labeling of the final item. With the help of traceability, you can track the process of assets and also record the information along with presenting the records of the previous asset. So, the traceability in Blockchain makes sure that any person can see the journey of goods through the supply chain.

Main Uses of Traceability

The most important part of traceability is to understand its real uses and in which sectors it is being implemented. Blockchain can enable traceability in various sectors where it is a chance that Blockchain traceability will be one of the most driving factors in those sectors. Blockchain helps in supply chain management to improve the traceability of different products. Let’s have a look that in which sectors, supply chain management is being used widely.


Nowadays, the fashion industry is facing a major problem of counterfeiting. Counterfeiting is the fraud of launching a product under the name of another organization. Counterfeiting has cost so much to the fashion industry in the sense of their annual sales per year.

Because of this, fashion brands are losing their name in the market. At this point, Blockchain traceability can help the fashion industry by keeping track of the goods to make this industry trustworthy to its customers. Blockchain needs to make sure that consumers have information about where these fashion assets are coming from. In addition, the major benefit of traceability is its use of unique identifiers to verify and find out the journey of a product in the supply chain.


Blockchain traceability is playing a major role in improving different troubles in the agriculture sector. The demand is increasing from consumers who want safe and nutritious food. These situations are demanding the necessity of traceability in the agriculture supply chain.

Traceability in the agricultural sector allows for the effectiveness of crop production. It also improves the management of agricultural finances. Blockchain can also help in collecting the data about specifications of crop fields such as humidity, temperature, ph, and soil moisture. Also, it enables farmers to make efficient decisions in agriculture. Collecting information about agri-food about its origin, location, and journey from farm to fork will guarantee the consumers about food’s quality and safety.

These technologies can also provide solutions for climatic changes in various sectors.


How happy a farmer would be when it is proved that the seeds he used in his crops are not fake. All of this is possible because of Blockchain traceability. Traceability in the food sector is a process of identifying the origin of foods and the ingredients in each feed in a supply chain management.

Consumers have started doubting the standards of their food day by day. So they want to know the origin of food and the process made during the manufacturing of food. Blockchain technology-based traceability helps consumers to know the source of food. It also accesses visibility in the information about the origin and freshness of food.

Workers who are working at each step in the supply chain have to give information about products to their producers. Therefore, traceability in the food supply chain reduces the risk of fraud and wrong labeling of food. In the process of the food supply chain, manufacturer, product number, place of manufacturing, processing details, packaging of food and labeling of food, shipment process & expiry dates are all important. Traceability is ensured by collecting and managing the information of various processes and creating its presentation format.

Chances of Next-Generation Traceability

Currently, the most important challenge everyone is facing in the world is developing trust among each other. The demands of consumers are being changed day by day. Further, visualizing the traceability discussion of assets from different industries in the supply chain is a bit difficult and can be challenging. Consumers are demanding less costly and efficient products with more accessibility.

Also, they are drawing their attention toward the origin and quality of goods. The industries have their information needs about their businesses; they want to know about the production methods and quality of products. They also need information about the commercial transactions made within the supply chain, and they also want to know the procedure of production from farm to the packaging process.

To make sure that the product is of the best quality and every process is verified, they not only need to track the item but also the bill of materials that makes the final product. In this complex supply chain method globally, Blockchain-based traceability fulfills the demands of businesses, their consumers, and the main authorities in the supply chain. Therefore, next-generation traceability needs to have its focus on advanced monitoring and complete transparency. Also, they should enhance and improve their flexibility in manufacturing products.


It is a need that traceability should be used widely to cover all the commodities present in our market. Also, this system benefits producers, manufacturers, suppliers, buyers, and consumers in supply chain management. While the traceability of Blockchain is already being used in different sectors, it can also introduce the next generation of traceability because it is important to gain trust from consumers so that they will not hesitate to buy products.

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Larry Wright

By Larry Wright

Larry Wright is a Pulitzer Prize-winning journalist and author. He is known for his insightful reporting and his ability to delve into complex issues with clarity and precision. His writing has been widely acclaimed for its depth and intelligence.